Government Might Sell Only 10% Of Total Spectrum: Report

The Department of Telecom is likely to sell only a 10 percent spectrum if auctions fall in March- April next year. In fact, the bids of an upcoming auction are expected to start on January 13. However, it is also expected that the spectrum auction (5G and 700 Mhz) will not attract bidding due to the high base price set by the TRAI.

"Given the high reserve prices, acute balance sheet stress of older carriers and absence of an immediate 5G business case, the government is unlikely to see any meaningful take-up of pure 5G and 700 MHz airwaves," Rajiv Sharma, research head at SBICap Securities, was quoted by Economic Times. Adding to that, "So, it won't raise even 10 percent of the targeted sales proceeds in the upcoming auction."

The Digital Communication Commission has approved the spectrum sale in March-April next year in India. If telcos bid for 4G and 5G airwaves, which is very unlikely, then it would generate Rs. 5.22 lakh crores.

Besides, the report states that Vodafone-Idea will not bid for the auction and if they go then they will be very selective. "While permits of Vodafone Idea in eight circles will expire in 2021, it may be very selective, given its adequate back-up airwaves to keep its business running, especially after its ongoing spectrum integration gets concluded, and also the refarming of its 2G/3G airwaves for 4G services," Sharma was quoted by the newspaper.

Rajiv Sharma also believes that Airtel is likely to go for the 1800 Mhz spectrum as the company will lose its usage rights in some circles by 2021. At present, the company is providing 4G in all 22 circles.

Even though all telecom operators have decided not to go for spectrum auction due to a high base price of 3,300-3,600 Mhz, the highest decision body making committee DCC has allowed the auction. This also means that the 5G rollout in India will get delayed.